There’s a fight to buy Airbnbs… UNDER $750,000 in purchase price —————— Here’s why ⬇️ Once you factor in the costs: •Down payment •Closing costs •Renovations •Furniture/Decor/Set Up •Amenities •Design Most people don’t have $300,000+ in cash to invest in a single property. Anything over $750k in purchase price requires huge amounts of capital that the majority of investors don’t have or aren’t willing to commit. **If you need help buying a cash flowing vacation rental, send me a DM**
Here is an email I sent my investor before going live on Airbnb. This was an 8-bedroom house in Florida. It cost us about $385K from downpayment, clsoign costs to rehab and furnishings. It could have been way more had we done a 25% downpayment. We dealt with Nathan Gort from thelender.com Here is the Breakdown you requested. Mr. X invested: $186,031.92 ($3,041.92 on card, $182,990 deposited to bank account). Mr. Y $197,460.62 ($5,560.62 on cc, $191,900 deposit in account) Home purchase wired to Title: $340,825.21 (20% down with the lender.com) Rehab: $28,218.73 (contractor $18,800, Locksmith $1,142, PM $8,276.73 Furnishings: $6,234.64 Utilities (internet, water, electric) $299.24 Landscaping & Pool $620 Miscellaneous: (Insurance, photos etc.) $10,148.02 Total expenses (rehab, furnishings, utilities, landscaping and pool) $45,515.63
This is why I do ground up luxury developments, once I have the land I'm not competing with anyone, and for under $750k (really under $500k) I can produce a property that has a lasting competitive advantage at a competitive price
This is definitely true, however, if you have a good business plan, track record and a good banking relationship, many times you can get the majority of all of that 298k back. The amount of revenue a place like that can generate is typically high enough to generate a 1M+ dollar appraisal and having an 80% LTV, you can get most of it back. Also, those closing costs are really high compared to what I have ever experienced in my own purchases.
🤔 2024 Max conforming loan 766,550 Purchase price 901,823 .15 down = 135,273 85 LTV = 766,549 Jaime can we teach em' ? ;) Taylor Jones for novices I'll agree, a Savvy team can easily bring on a 1,000,000 property with that same 300k out of pocket.
Does this make opportunity at that pricepoint?
:)
Great insight! Taylor Jones
Husband | Co-founder (P)harmless Health | Helping men combat obesity, and reclaim masculinity
5moVery accurate post! What are some strategies you would have for those competing for these types of properties? Aka most newer investors.